GDP seen growing 8.5-9.7% in 2010-11: Pranab

New Delhi: India’s economy is seen growing by 8.5-9.7% in the 2010/11 fiscal year and monetary tightening should ensure the pace of recovery in Asia’s third-largest economy is not hit, the finance ministry said in a report released on Tuesday.

India’s economy is on the path to regaining the growth momentum seen before the global economic slowdown, finance minister Pranab Mukherjee said.

Pranab also said that there was a need to have country-specific formulae to address current account balances.

He said action taken by individual nations to address current account balances should not hurt the economies of other countries.

India had earlier said its GDP would expand around 8.5% in the year to March 2011 while the International Monetary Fund projects growth at 9.7% for calendar 2010.

The report also said measures to temporarily ease liquidity were consistent with the Reserve Bank of India’s (RBI) policy stance of containing inflation and anchoring inflationary expectations.

The RBI has raised its key policy rate five times by a total of 125 basis points since March, to help stamp down inflation that stood at 8.6 percent in September.

The Reserve Bank will review policy on 2 November and analysts expect a 25-basis point hike in key rates.